What Student Loan Borrowers Need to Know About Income-Driven Repayment Plans

The future of income-driven repayment (IDR) plans is in doubt after the Department of Education shut down applications on Friday.

The decision to cease applications came after the 8th Circuit Court of Appeals upheld a temporary block of the Saving for a Valuable Education (SAVE) plan on Feb. 18, siding with a coalition of Republican-led states that sued to block the program.

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“A federal court issued an injunction preventing the U.S. Department of Education from implementing parts of the Saving on a Valuable Education (SAVE) Plan and other IDR plans,” a notice at the top of the federal student aid site reads.

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The change has put the 8 million borrowers enrolled in SAVE, and others enrolled in one of three other IDR plans, in limbo.

The SAVE plan was touted as the “most affordable repayment plan” by the Biden Administration as, similar to other IDR plans, SAVE personalized borrowers’ monthly student loan payments to their income and family size. SAVE borrowers who made less than $15 an hour, for instance, had a $0 monthly payment towards their student loans—which an estimated 4.6 million SAVE borrowers qualified for. The program also promised borrowers who took out $12,000 or less in student loans forgiveness after a decade of payments.

Still, it is unclear how the 8 million SAVE borrowers will be affected under the Trump Administration.

What happens next?

The Department of Education did not immediately respond to a request for comment on how the court injunction would affect SAVE borrowers, and those on other IDR plans.  

Prior to the most recent court decision, SAVE borrowers were enrolled in general forbearance, meaning they did not have to make any monthly payments and interest was not accruing on their loans. The Office of Federal Student Aid predicted that they would be unable to calculate accurate monthly payments for borrowers until September 2025, according to the Education Department information page that was last updated in January. 

The Department of Education previously stated that all forgiveness promised for borrowers enrolled in an income-driven repayment plan was enjoined.

Student loan advocates have little hope for forgiveness under the Trump Administration, as some organizations have claimed that the actions taken go beyond what the court legally required. “Shutting down access to all income-based repayment plans is not what the 8th Circuit ordered—this was a choice by the Trump Administration and a cruel one that will inflict massive pain on millions of working families,” said Student Borrower Protection Center Deputy Executive Director and Managing Counsel Persis Yu, in a Monday statement.

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